Wendy Wall, the former president/CEO of the defunct Pepsi Cola Federal Credit Union in Buena Park, Calif., was sentenced to 21 months in federal prison last week after she pleaded guilty to one count of bank fraud.
On Jan. 23, U.S. District Court Judge James S. Selna in Santa Ana, Calif., also ordered Wall to pay $480,273 in restitution to the NCUA. Her sentence included four years of supervised released after prison.
For more than 10 years, Wall embezzled credit union funds by opening a "nominee account" at Pepsi Cola FCU that was not affiliated with a member, according to court records. She then created fictitious loans on the nominee account, drew money from these loans and transferred the funds into accounts at the cooperative in her name or her husband's names.
Wall also wrote checks from the nominee account and deposited the checks into her personal bank accounts at other financial institutions. Court records showed Wall caused checks made payable to her to be generated from the Pepsi Cola FCU joint-share account at U.S. Bank, which consisted of funds belonging to other members. She deposited these checks into her personal bank accounts.
In addition, Wall deposited checks written to the credit union to pay off personal loans obtained by other credit union members into her personal account, according to court documents.
In a presentencing report, federal prosecutors said that although Wall's criminal conduct lasted more than a decade, they saw no evidence that she used the stolen funds on "anything lavish or irresponsible" and "basically used the money for her family." Prosecutors, however, did not specify how she spent the money on her family.
The NCUA liquidated PCFCU on March 15, 2013 after determining it was insolvent and had not prospect for restoring viable operations. The credit union, chartered in 1956 to serve employees of the Pepsi Cola Bottling Co., managed assets of $652,000 and served 558 members.
The NCUA's liquidation announcement of the credit union, however, did not say whether Wall's fraud scheme contributed to the cooperative's closure. Wall wasn't charged with bank fraud until July 2014.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
